KPPI corporate secretary Federico Noel said the loan availment was approved by the company’s board of directors last week. Rhinestone is a major foreign investor within the Kuok Group.
Noel also said the KPPI board has approved the conversion of the company’s deposit and advances in its subsidiary KPPI Land Corp. into equity "in the form of redeemable preferred shares subject to the approval of KPPI Land’s board of directors and stockholders."
In November last year, KPPI said it planned to dispose of its shareholdings and other interest in its 60-percent subsidiary KPPI Land in a move to generate funds for its debt reduction program.
KPPI Land is a joint venture with Pelangi Berhad, a Malaysian-listed company also engaged in the business of property development in Malaysia. It is presently developing 1,051 hectares of land in the towns of Silang and Carmona in Cavite.
KPPI had cited as part of its corporate strategy the sale of some of its assets to reduce its liabilities and give it the breathing space needed to continue to survive under the prevailing difficult conditions.
"It is important that the company be able to continue to carry itself until such time as the real estate market normalizes. In this way, it can obtain good values for its extensive land assets," the company said.
Aside from KPPI Land, Kuok’s other subsidiaries and affiliates are KPPI Realty Corp., Sky Leisure Properties Inc. and Exchange Properties Resources Corp.
The group has a string of vertical development projects like condominium offices, a beach resort in Ternate, Cavite (Caylabne Bay Resort) and a 107.2-hectare lot in Tagaytay, as well as landholding in Cebu, Batangas, Laguna and Cavite.
Kuok said a successful sale of KPPI Land "could result in the elimination of all liabilities and could leave the company with enough funds to carry itself through this difficult period."
As of end-2000, Kuok still has over P2.5 billion of interest-bearing liabilities to deal with, although this was vastly improved from P4.8 billion due to a number of sales, including its 23.5-percent stake in KSA Realty Corp. (the owner of the Enterprise Center building) and its 26-percent interest in EDSA Properties Holdings. – Conrado Diaz Jr.